Trump team and Canadian officials resume talks to revamp NAFTA

Sep 08, 2018, 02:10
Trump team and Canadian officials resume talks to revamp NAFTA

"If you break off one member of this agreement, you break it all, and that would be bad news for U.S. businesses, for American jobs and for economic growth", said U.S. Chamber of Commerce President and CEO Thomas Donohue.

In fact, since the start of NAFTA talks in August 2017, Trudeau's government set out three "no-go" zones: Canada's quota system that controls dairy, poultry and egg production, a dispute settlement system to resolve complaints about unfair anti-dumping and counter-vailing duties, and the so-called "cultural exemption".

"If Canada has to give up and reform the whole (dairy) system, it's going to have a big impact", Novakovic said.

Freeland expressed optimism. "We are making good progress", she said.

The tone of the NAFTA renegotiation "has painted the U.S. as an antagonist that has to be handled", he says.

As the two sides met for talks, new economic data showed that the U.S. trade deficit with Canada grew to US$3.1 billion in July.

While the Trudeau government has rejected Trump administration criticisms of Canada's high tariffs on dairy products, it has not explicitly stated that supply management - now a hot-button issue on Canada's political scene - is non-negotiable.

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The U.S. and Mexico reached a side deal last month, leaving Canada to negotiate separately with the U.S.

"If it doesn't work out that is going to be fine for our country".

Negotiations between Canada and the United States are to resume in Washington on Wednesday.

Trump abruptly canceled an outing on Monday, a federal holiday in the US, "to make calls specifically on trade and other global issues", White House Press Secretary Sarah Huckabee Sanders said in an email.

Dispute settlement would give Ottawa the ability to challenge USA tariffs and ensure that Canada maintains certain cultural exemptions, industries or arts that are seen as part of the country's identity.

The statement also pointed to other encouraging signs in Canada, including evidence the real estate market has begun to stabilize as households adjust to higher interest rates and new housing policies.

"We will continue to take a gradual approach, guided by incoming data".

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Trudeau made clear, however, he would insist on keeping the so-called Chapter 19 dispute-resolution mechanism that Washington wants to scrap. If we don't make a fair deal for the USA after decades of abuse, Canada will be out.

The Trump administration notified Congress last week that it could enter into a new trade deal with Mexico, but legislative procedure would allow Canada to enter into the agreement up until September 30 - when the text of the trade pact must be submitted to Congress.

The overall goal is to reach a deal by December 1 so Congress can give its approval to a revised NAFTA before Mexico's new president takes office.

The talks to remake NAFTA resumed after hitting an impasse last week over 's high dairy tariffs and USA moves to eliminate a dispute resolution system known as Chapter 19 that potentially favors Ottawa. "We have a president that doesn't always follow the rules as they're laid out", Trudeau said in a radio interview.

Others say it is Trump's insistence on some version of a sunset clause in the "new" trade deal that most undermines the sense that NAFTA was also a reliable and settled partnership.

Amid the charged political atmosphere, dogged by Trump's repeated threats to leave Canada out of the revised NAFTA, Freeland said she believes "a deal that is good for Canada, good for the United States and good for Mexico is absolutely possible".

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